State Rep. candidate Kerwin responds to homestead questions

May 25—As the House District 58 runoff race heats up so too have charges against one of the candidates involved. Charges concerning property exemptions candidate Helen Kerwin labeled unfounded.

Early voting in the Republican runoff concluded Friday with the election scheduled for Tuesday.

Neither Kerwin nor state Rep. DeWayne Burns, R-Cleburne, managed to collect 50% of the votes cast in a three-candidate race during the March Republican Primary. The winner of Tuesday's runoff will face Libertarian candidate Richard Windmann in November's general election.

District 58 includes Johnson and Somervell counties.

Kerwin, a Glen Rose resident, previously served as mayor of that city in addition to having held other elected offices.

Several, including district resident Jamie Cox question a homestead and agricultural exemption on Kerwin's Glen Rose property. Exemptions Kerwin and Somervell County Chief Appraiser Wes Rollins insist are legal.

"I got a phone survey call," Cox said concerning the runoff race. "It asked if I would vote favorably or unfavorably for the candidate based on how they felt about the NRA and other things. The last question was if I would vote favorably or unfavorably for Helen if I knew she was claiming a homestead exemption on her business property in Glen Rose.

"Highly unfavorable is not even descriptive enough. People are getting run out of their properties in Texas because of property taxes."

About three acres of Kerwin's property includes Country Woods Inn, a rental property owned under a limited partnership, which Cox and others insist disqualifies the property for homestead exemption.

For a property owner to claim a homestead exemption the property must be owned an individual, not a corporation, according to the Texas Comptroller.

"Only a homeowner's principal residence qualifies," according to the Texas Comptroller's website. "To qualify, a home must meet the definition of a residence homestead. The home's owner must be an individual (for example, not a corporation or other business entity) and use the home as his or her principle residence on Jan. 1 of the tax year."

Given the cry from Texas residents for property tax reform and relief, such places Kerwin in a bad light, Cox said.

"Helen signing the affirmation and signature, that is committing a Class A misdemeanor because [the property] is an LP and is not true and correct and does not meet the qualifications under Texas law for the residence homestead for which she is applying," Cox said.

Although Gov. Greg Abbott endorsed Burns in previous elections he chose to endorse Kerwin this go around.

Burns, and several other Republican state representatives ran afoul of the governor after they declined to support Abbott's school choice or, depending on who you ask, voucher bill during the last legislative session.

Such led to charges of Abbott recruiting candidates, including Kerwin, to run against Burns and the other Republican representatives who failed to follow his marching orders.

Charges Kerwin disputes. Kerwin said that her daughter and former state Rep. Arlene Wohlgemuth, who served as state representative during Kerwin's time as mayor of Glen Rose, asked her to run, not Abbott.

"I understand I fit the profile of the challengers to these 20, 21 representatives who voted against Abbott's bill because I am pro school choice," Kerwin said. "But no, Gov. Abbott, I never even talked to him about it and he's done three rallies for me. All he asked me was how it's going."

In response to residency questions raised by Cox and others, Kerwin pointed out that she's lived in Glen Rose since 1975 and purchased her current property in 1980.

Kerwin cited her stints as mayor of Glen Rose, first Republican Somervell County commissioner, president of the Somervell County Commission and experience as an executive board member of the North Central Texas Council of Governments in addition to her 4-H and community involvement and business ownership as proof of her residency in Glen Rose.

"Of course I went to Fort Worth and babysat my grandkids when they were little," Kerwin said. "But I never lived in Fort Worth. I've lived in Glen Rose all this time."

Cox countered that, during a visit to Country Woods Inn, a staff member told her that Kerwin stays in Fort Worth with her daughter, a claim Kerwin labeled false.

Kerwin said a downtown flower shop and the Country Inn helped pay for her daughter's college tuition.

"I started with one room in the main house, of course, it's my homestead," Kerwin said. "I converted it and did a second room in 1997 and in 1998 I did a third room upstairs."

Kerwin said she later converted two hay barns on the property into cabins.

"Over the last 29 years I have built it up to where it's a regular inn," Kerwin said. "We hold 50 people. We built a chapel. We do church retreats; we do weddings. Do a lot of family reunions."

Although the property had previously been homesteaded, Kerwin said she formed an LP in her name as sole owner after city leaders asked to use a portion of her property for a river walk project.

"It took about three years for them to convince me that I wouldn't be liable once the public could walk on that portion of my land," Kerwin said.

The LP, Kerwin said, is to protect her from liability.

Kerwin said she checked with Rollins and was told that as an LP with one owner can be homesteaded according to the tax code and that renting the property is legal.

LPs and limited liability companies are convoluted matters, Rollins said.

"Every time one comes in we send it off to our counsel and have them look that over for us," Rollins said. "We don't make those decisions ourselves."

Convoluted aside, such LP and LLC situations arise often in Somervell and other counties, Rollins said.

"Where you've got a business and we carve out a portion to apply the homestead to," Rollins said. "She's got 35 acres and 3 for her business and we carved an acre out that we applied the homestead to. It's perfectly legal and that happens time and time again."

Other attorneys disagree including Cleburne attorney Scott Cain, who also serves as mayor. As an attorney, Cain deals largely in property and business matters.

"As a general rule, you can't claim a homestead exemption on business property," Cain said. "The homestead exemption statute is clear that it's got to be for a person, residential. I can't claim a homestead exemption on my office property, for example, and I'm getting hammered on my property taxes on it."

Cain cited his legal dealings on numerous property and business cases.

"If there is some other provision of law that is being relied on to be valid it would be nice for somebody to point that out," Cain said. "I'm not aware of any and I've not seen one. I know the law treats LPs like corporations or business entities as separate and independent of the individual."

The issue, Cain added, is less about Kerwin and more about the law.

"One of the biggest issues in this state right now is property taxes," Cain said. "People are getting taxed out of their homes. So it's important that we know whoever represents us is being transparent, fair and playing by the same set of rules as the rest of us."

Cain said too that an LP cannot be solely owned.

"You have the limited partner and the general partner," Cain said. "To have the liability protection from an LP the law says that the limited partners don't own the property. The partnership owns the property and the general partner manages it. That I do know is crystal clear and there's plenty of case law on that."

Cox also took issue with an ag exemption Kerwin claims on 34 acres of her property. The property, Cox said, contains one horse and as such does not qualify for an ag exemption.

Kerwin countered that she has long raised and sold hay on the property and still does, a claim Cox questioned but one Kerwin remains steadfast on.

Burns declined to comment on the matters in detail.

"I won't comment on anyone's specific situation," Burns said. "But Texas law is clear. Business entities aren't entitled to the tax benefits of a homestead exemption."